Opinion

Security and Choice in Health Reform

By Cynthia Browning

Posted:
05/05/2014 09:28:05 AM EDT

In this column I will describe a plan for achieving our health reform goals of universal coverage, quality, and cost containment.
This plan will provide security and choice for Vermonters in obtaining both health insurance and health care. It involves the
intensification and expansion of programs and policies that have already proven to be successful, without major disruption in our insurance or tax systems. The additional cost will be modest and sustainable, and there are suggestions about how to pay for it.

This plan is based on where we are now: after the federal Affordable Care Act but with great uncertainty about the proposed state run
health insurance program called Green Mountain Care. There is reason to believe that after the implementation of Vermont Health Connect,
however imperfect that process was, the numbers of uninsured and underinsured Vermonters have decreased. It is already possible to
separate employment and insurance, taking the burden of health insurance off of businesses, since individuals can purchase in VHC if their employment does not offer insurance. Insurance companies must now provide certain levels of coverage and must cover
pre-existing conditions. Our two major insurance companies are both nonprofits, with relatively low administrative costs. Our Blueprint
for Health program for reducing costs and improving quality of care for the most seriously ill Vermonters are showing useful and
promising results.

Advertisement

We do not yet know the benefits package for the proposed state run publicly finance GMC insurance program, nor do we know the costs. We
do not have the financing plan. We do not know whether necessary Federal waivers would be forthcoming, which compromises Vermont's
policy independence. Until and unless those unknowns are resolved, there is no single payer GMC plan to evaluate or to adopt.

In the face of such uncertainty, I believe that many Vermonters may prefer a reliable and rewarding path something like what is
presented here over an undefined, disruptive, and impractical ideological proposal. The plan described here could therefore be
called Vermont Preferred. It was developed by a bipartisan group of lawmakers with assistance from the Joint Fiscal Office and the
legislative health policy consultant Ken Thorpe.

ACCESS TO COVERAGE & CARE:

*** Maintain the private insurance market with voluntary participation in Vermont Health Connect for individuals and
businesses and greater variety of insurance plans. This would mean that there would be maximum choice allowed by the ACA concerning
whether to go through the exchange or not. It could mean more variety in types of plans, including basic coverage plans or more
high deductible/health savings accounts plans that many previously found useful.

*** Expand Cost-sharing Subsidies for individuals up to 400% of the

Federal Poverty Level for individuals who purchase through the VHC exchange and maintain state-sponsored premium tax credits. This
would enhance affordability for about 9,500 low to middle income Vermonters, so that a total of about 26,000 receive cost sharing
assistance, aside from the many on Medicaid with complete financial support.

*** Extend small business health care tax credits with state financing for two more years when the federal tax credits expire. It
would be good to make the application forms easier.

*** Encourage universal coverage to what is expected to be the last 3% or 4% of Vermonters through intensive outreach for enrollment in
Medicaid and coverage through VHC.

*** Ensure recruitment and retention of our high quality medical workforce through investing up to $5 million per year in our medical
education loan repayment program for providers who commit to working in Vermont. We need to be sure that providers will be available to
care for Vermonters. (Also counts for quality below.)

QUALITY CARE:

*** Expand and intensify the successful Blueprint for Health programs to improve quality while reducing costs through better
coordination and delivery of health care. This is probably the most important program for both quality and cost containment since it
assists those Vermonters who have serious chronic conditions that require a great deal of care.

*** Continue deployment of Electronic Medical Records through the state to insure quality care delivered in a timely way, while
reducing duplication and errors.

*** Ensure recruitment and retention of our high quality medical workforce through investing up to $5 million per year in our medical
education loan repayment program for providers who commit to working in Vermont. (Also helps with access and affordability.)

COST CONTAINMENT:

*** Reduce the Medicaid cost-shift by significantly increasing Medicaid reimbursement to health care providers. This will support
the health care provider system, relieve upward pressure on private health insurance premiums, and ensure that government pays more of
the true costs of its programs. It will also help to ensure that Medicaid patients can actually get access to a doctor.

*** Encourage implementation of global budgets to contain costs and reduce uncertainty for hospitals and the communities they serve when
and where this is appropriate.

*** Integrate lessons learned from the unfolding State Innovation Model (SIM) grant pilot projects on payment reform (moving away from
fee for service). Caution must be used here to ensure that incentives to reduce costs do not compromise patient care.

*** Expand and intensify the successful Blueprint for Health programs to improve quality while reducing costs through better
coordination and delivery of health care. (Also goes for quality.)

*** Wellness programs and incentives -- create a working group to develop better ways to encourage programs that support healthy
behavior by Vermonters in order to prevent or mitigate diabetes, heart disease, and other conditions related to life style choices.

FINANCING:

*** Altogether these initiatives might cost between $30 million and $43 million a year. This modest cost makes funding much easier and
much more sustainable across time than the $2 BILLION cost of GMC.

The funding for Vermont Preferred could be obtained through relatively modest changes in the income tax, perhaps based on
recommendations for tax reform from the Blue Ribbon Tax Structure Commission Report of several years ago.

*** One possibility would be to raise the funds through a premium benefits tax on the value of employer sponsored health benefits
received by Vermonters. This recommendation for tax reform was contained in the Blue Ribbon Tax Structure Commission Report of
several years ago, and it is a longstanding proposal to increase the equity of our health insurance system. This is because the employer
paid premium can be seen as a form of compensation that is not taxed. To maintain progressivity, the tax could apply only to those
above a certain income level, and it could have tiered rates. To illustrate what this means, suppose that a company pays $4,000 per
year to cover health insurance premiums for an employee who pays $2,000 towards the cost. The employee receives the $4,000 premium
subsidy as part of their overall compensation, but does not pay a tax on it. A small premium tax on this value of perhaps 2.7% would
mean an additional tax payment of $108. This would only apply to taxpayers above a certain level of Adjusted Gross Income, and only
to those receiving this form of benefits compensation. Compared to the massive tax changes probably involved in shifting from premiums
to tax financing that will be required by the state run GMC program, with new payroll taxes and income taxes along with a kind of public
premium tax likely, this is indeed a modest change. But it could finance the expansion and intensification of effective policies
described above.

The Vermont Preferred Plan is similar to the approach taken by the Netherlands and Switzerland. There is a regulated health insurance
market with private insurance carriers, and individuals who qualify for financial assistance get public premium subsidies. Such a system
can ensure that all have access to insurance and to health care.

Patients, providers, the insurance companies, the state, and the federal government all share risk and responsibility and all provide
resources to the system.

Compared to the GMC proposal, Vermont Preferred is a moderate plan. But that is actually an advantage. Why not take effective and
reliable steps to improve coverage, quality, and cost containment now? Why continue to spend time and resources on the development of
a complex and difficult proposal that requires uncertain Federal waivers and political acceptance of massive changes in the tax
system, and that may never actually go into effect? I ask for open minded consideration of this approach to health reform through
security and choice.

Cynthia Browning represents the towns of Arlington, Manchester, Sunderland and Sandgate in the state legislature.

Welcome to your
discussion forum: Verified accounts are now required for
immediate posting. Please verify your e-mail address in Disqus, or
sign in with your social networking account. You may also post using your e-mail address (which will remain private), but those posts will first need to be approved by the moderator. Comments made here are
the sole responsibility of the person posting them; these comments do
not reflect the opinion or approval of the Manchester Journal. This forum encourages open, honest, respectful and insightful discussions; there is no need to be offensive. Read the guidelines.

ODESSA, Texas (AP) — A West Texas man has been charged with impersonating an officer by using sirens and flashing lights to skip to the head of the drive-thru line at a fast-food restaurant. Full Story

Sufjan Stevens, "Carrie & Lowell" (Asthmatic Kitty) Plucked strings and pulsing keyboards dominate the distinctive arrangements on Sufjan Stevens' latest album, and in the absence of a rhythm section, they serve to keep time. Full Story